Social Security (Additional Payments) Bill

Kirsty Blackman Excerpts

2nd reading
Wednesday 22nd June 2022 Commons Chamber

[Kirsty Blackman (Aberdeen North) (SNP)]

If the hon. Gentleman thinks that is very generous, how does it compare with benefits systems across the EU, for example, that are significantly more generous?

[Lee Anderson]

I will tell the hon. Lady what is generous: a single parent, like my friend and I were all those years ago, getting £24,000 a year for working 16 hours a week. [Interruption.] The hon. Lady can shake her head, but I think that is a pretty generous payment. That person would not be paying any income tax. Come to Ashfield and ask if £24,000 net is a good income. It would be a struggle to find people who are earning that sort of income so, yes, it is a generous income.

As we level up the country, we need to level up the skills of people who are trapped in this life of benefit dependency caused by the Labour party—I will stick to my words. In the meantime, this caring Government realise that families need extra support, which is why we are providing £37 billion to support families. Remember this is taxpayers’ money. There is no magic money tree, so hard-working people are having to pay for this.

This Bill will ensure swift action by providing the power to make two cost of living payments of £650 to 8 million households throughout the UK. This is real, targeted help for real, vulnerable people. The £200 rebate on energy bills has been doubled to £400, and it is now a grant, so it will not be paid back. The living wage is up, the national living wage is up, the universal credit taper rate is up and national insurance has been cut, so 70% of those who pay national insurance will pay less and more than 2 million people will pay no national insurance at all. We are doing all we can to ensure we help to keep people’s head above the water by spending more than £80 billion on universal credit and legacy benefits, which now represent 3.8% of our GDP.

We cannot keep asking the hard-working taxpayer to put their hand in their pocket to pay more and more. We must all do our bit. Although I welcome that the Bill will get immediate support to families, we must all work hard to make sure every single person in this country has the chance to support themselves. The benefits system should be there to help people in their hour of need; it should not be a way of life.

If it were left to Labour, everyone would be sat at home feeling sorry for themselves, but I am different. I want people to have a good job, to earn more money and to enjoy the fruits of their labour.

--- Later in debate ---

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to speak for the SNP on the Social Security (Additional Payments) Bill. The Chancellor announced this uprating a number of weeks ago, having dragged his feet for so long. He announced the energy loan at the Budget, after announcing it earlier in the year, with a “Ta-da! Look at this! This is wonderful. We are giving you all this.” It was never sufficient. We called immediately for the energy loan to be a grant and for it to be increased.

The big announcement at the Budget was, “Hey, look, you can have cheaper solar panels!” That does not help my constituents, who are literally unable to buy food. We called for these changes then, and the Chancellor waited and waited until the end of May to make this announcement.

It has been a few weeks since the end of May, and we saw this Bill only last week. Parliamentarians have been able to scrutinise this Bill for only one week. The Government, or the Secretary of State, may say that this is because the Bill is so complicated, but they had weeks beforehand in which to decide what it would look like, and they have had weeks since the announcement in which to present it and give us an opportunity to see it. We should not be doing this in a single day. I appreciate that there is a tight timescale and that the Bill must be put through now in order for the payments to be made; what concerns me is the time during which we have not been able to scrutinise it effectively.

My other concern about process involves the money motion. It is drawn as tightly as possible. No doubt when we reach the Committee stage the Government will say what they say in every Finance Bill Committee: “All the amendments are about having reports. All the Opposition want are reports, rather than any actual changes to the Bill.” However, such a tight money motion makes it impossible for us effectively to put forward the asks that we have and to make it clear that this is wholly insufficient and that there are massive changes that we want to introduce.

Nevertheless, I congratulate the House on the fact that we are actually debating spend. That is very exciting—it is wonderful—because we never debate spend. We get the estimates for five days a year, or is it three? For a handful of days a year, we are allowed to debate those. To be fair, we are now allowed to debate spend, but it does not happen. We have the Budget, and then we have the Finance Bill. The Finance Bill is entirely about taxation: it is not about spend. We do not get the opportunity to debate and scrutinise spend properly, so it is very nice to get the chance to do so today—albeit with a money motion that is so unbelievably restrictive that we cannot put forward any amendments that make any sense or assist our constituents in any way.

Before I proceed, I want to thank Chris Mullins-Silverstein and Linda Nagy, who have been incredibly helpful in putting stuff together very quickly to enable me to make a speech that makes sense—or, I hope, largely makes sense.

This is the situation in which we find ourselves. As we heard from the right hon. Member for Leicester South (Jonathan Ashworth), in October, energy bills will be up by £1,500 for the average household, which is far more than the amount that the Government propose to provide for people—and that is before we take into account the other increases that we are seeing. According to the Office for National Statistics, pasta is up by 50%, bread by 16% and rice by 15%. I pay tribute to Jack Monroe for the huge amount of work she has done on the “Vimes Boots” index, which allows inflation to be measured not just in the way in which it has historically been measured, but in a way that relates to how people shop—the people at the lowest end of the income spectrum, who count every single penny in the supermarket to work out whether they can possibly afford what they have put in their baskets. Inflation for those lowest-income families has increased by significantly more than inflation for the families who are earning more. It is even worse for disabled householders, who are seeing even more significant increases in energy bills, and the same goes for pensioners.

I was delighted to hear the hon. Member for Ashfield (Lee Anderson) suggest that things are very generous. He cannot have the same inbox as me. According to my inbox, things were dire before Brexit, dire before covid, and dire before the massive increase in inflation that we are seeing now, and they have only got worse. The fact is that the impact of Brexit has increased our food prices. Less migration means less money for the Government to spend, while net migration reduces net public sector debt and increases the amount that the Government have to spend. The former Chancellor George Osborne’s Red Books make that explicit. It is clear that he was seeking to crack down on migration, and that doing so would reduce the amount of money that the Government had to spend. It costs money for us to reduce migration. It means that we will have less to spend on people who stay here, who live here, who work here.

The announcement that this is a £37 billion package is genuinely a joke. In the Government’s calculation of the £37 billion, they have included the fuel duty changes. A significant number of my constituents, especially the poorest, do not drive. They are impacted by the price of supermarket vans having to drive around and small businesses’ costs increasing, but the fuel duty does not make a difference to their daily lives. They do not fill up their fuel tanks because they do not have fuel tanks. They cannot afford cars. So including the fuel duty rise in the £37 billion is ridiculous. Including the freeze on alcohol duty is one of the cheekiest things I have ever seen in this place, and I was here all the way through the Brexit debates. The Government cannot include an alcohol duty freeze and say that they are helping with the cost of living. “We are helping the poorest people to save money on their alcohol.” People who cannot afford pasta are not helped by freezing alcohol duty.

These things that are being included in the £37 billion are listed on the factsheet on the Government’s website, by the way. The £37 billion also includes lots of already planned stuff. It includes what has happened with national insurance, and it includes things that were put in place when the Government thought that increasing benefits by 3.1% in April 2020 was sufficient. It includes a massive chunk of that. The Government cannot stand up and realistically say that this is a £37 billion package, because it is not. These are not the positive changes that my constituents and people across Scotland and the UK want to see.

I am pleased to hear that disabled people are getting an additional amount of money. That is a good move by the Government, but it does not take into account the increased costs that disabled people are seeing, including the massive increase in scarcity affecting gluten-free diets, for example. More disabled people have specialist diets than people who will not get the £150 increase. Disabled people spend more time at home, and it is the same for pensioners. The increases that are happening for those two groups are not sufficient to cover the increases they are facing in their energy costs, particularly, and in specialist diet costs.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I am listening very carefully to the hon. Lady’s arguments, and she is making some important and useful points, but I have to disagree with her. She cannot honestly stand up here this afternoon and almost dismiss this enormous sum of expenditure that the Government are making by saying that it is not sufficient and that she wants more. Perhaps she could explain where all this extra resource is going to come from. I personally believe that the Chancellor of the Exchequer listened and took on board arguments that many of us were making earlier this year about the rising cost of living, and that he has done everything possible to make his pounds go as far as they can in providing relief to those on low incomes.

[Kirsty Blackman]

The Chancellor of the Exchequer did listen to the arguments that were made, and I absolutely welcome the fact that he came back and said, “What we did before was not enough.” I do not know if he actually said that, but he said that he was going to do more and bring forward more. I am pleased that we are discussing this today, and I am pleased that these increases are happening, but I am making the case that the additional payments that are being made do not cover the cost of living increases. I do not think they are sufficient. and I do not think they will assist our constituents who are already struggling. The right hon. Member asked where the money would come from. We have always said that the windfall tax should be applied more broadly than just to oil and gas companies. We have always said that it should be for all those who made excessive profits during covid. Why should the Amazons and the Sercos of this world get away with making so much money during the pandemic and not have the Government look at that?

The reality is that the UK Government do not have to run a balanced budget. That is how the UK Government budget works. The Scottish Government have to run a balanced budget by law; the UK Government do not. There is far more flexibility in the budget than the Chancellor explains. When he stood up on 27 May, he was already looking at an additional £30 billion of fiscal headroom in the next few years, compared with his earlier projections and targets—compared with what he had hoped to get. There was already extra space, before he made the decision to introduce the supplementary tax on oil and gas companies. There is money there to do the additional payments and the additional requests that we are asking for today.

The UK Government have failed in a number of places. For example, they have failed to keep the triple lock for pensioners. They failed to keep the universal credit lifeline. They failed to implement a pension credit take-up strategy. They failed to come forward with cost of living measures as early as they should have during the course of the Budget. They have failed to scrap the evil sanctions regime. They have failed to produce a strategy to tackle child property. They have failed to bring in a minimum child maintenance payment. They have failed to uprate benefits by anywhere close to inflation this year. They have failed to scrap the rape clause. They have failed to bring in a real living wage that people can actually live on. They have failed to bring forward the long-promised employment Bill. They have failed to end the Department for Work and Pensions vicious loans clawback.

In contrast, the SNP Scottish Government running that balanced budget is delivering for people in Scotland. In Scotland, we are mitigating the bedroom tax. We are doubling our game-changing Scottish child payment. We are uprating benefits by double the level that the UK Government are. We are paying carer’s allowance supplement to people who are carers. We are paying £200 child winter heating assistance to families with severely disabled children and young people. We are increasing our school clothing grant, which is not available across the board in England and is at the discretion of local authorities here. We are offering 1,140 hours of childcare to all eligible children, no matter their parents’ working status. We are providing five new benefits worth up to a maximum of more than £10,000 by the time a first child turns six. That is £8,200 more than that provided in England and Wales. We are also providing additional money for subsequent children that is significantly in excess of the amount being provided here.

I therefore have some calls for the UK Government. I would like the UK Government to now uprate all social security benefits by 10% and backdate that to April 2020. The Chancellor stood there and said that uprating benefits would be less than the additional payment he is making—I want him to do both. This is a sticking plaster. Giving this additional one-off payment does not solve things for next year. It does not undo the fact that this year’s increase was woefully insufficient.

I would like the UK Government to make an additional £25 a week uplift to universal credit and to extend that to all legacy benefits to undo the harm done by cancelling the £20 a week increase last year. I would like them to cancel the rape clause, the two-child limit and the bedroom tax. There is only so much mitigation that the Scottish Government can do within our balanced budget.

I would like the UK Government to produce a child poverty strategy and to make tackling child poverty a national mission, as it is in Scotland. I would like the UK Government to bring in the long-promised employment Bill. They promised 28 times that they would bring in an employment Bill in the Queen’s Speech, and no employment Bill appeared in the Queen’s Speech. I would like them to match Scotland’s commitment to dignity and respect for those claiming disability benefits. I would like them to bring in a real living wage and to scrap the ageism in the pretendy living wage.

From day one of the Chancellor’s energy loan, which he announced earlier this year, we called for it to be a grant, rather than a loan. In May, the Chancellor U-turned. He changed it from a loan to a grant and he increased it, like we had asked. Now, we must see a U-turn on the five-week wait for universal credit. We must see that payment become a grant for those who get universal credit. We must not see those payments being clawed back.

The UK Government have 85% of the powers on social security. They have all the powers that relate to energy, all the powers that relate to the minimum wage and all the powers that relate to national insurance. We are being failed time and time again by the UK Government. We have asked for these measures to be devolved. We have amended things for these measures to be devolved. We have voted for these measures to be devolved. We have called, at every opportunity, for devolution of employment law, for devolution of energy, for devolution over the minimum wage, and for devolution over national insurance. The UK Government refuse. The UK Government are continually refusing and clawing back powers from the Scottish Parliament—in their United Kingdom Internal Market Act 2020, for example. The Brexit Freedoms Bill is set to remove powers from this Parliament and centre it even more in the Executive than it already is. This is not the way to run a democracy.

People are struggling. Even with these payments on the horizon, people still struggle to see how they will get through the year. The only choice is for Scotland to become an independent country. Only by having the full powers of independence will we be able to protect people and help them through the cost of living crisis, in contrast to the UK Government who refuse to do so.

--- Later in debate ---

[Sir Stephen Timms]

That would help—just modernising the old systems would help, and I will say something about that in a moment.

We are getting ad hoc payments from the Treasury to tide us over. The Secretary of State rightly spelled out to the Committee the downsides of one-off ad hoc payments such as those that the Bill enables. In oral evidence in February last year, she told the Committee that there were higher risks of fraud attached to one-off payments and that they can make it difficult for claimants to budget effectively—both quite telling points. She said that one-off payments were not

“one of the Department’s preferred approaches”

for providing that financial support. She noted:

“There are some challenges about fraud”

and that there would be difficulties if people claiming tax credits received a one-off payment and then moved to universal credit shortly afterwards. On the question of what might work best for claimants, she told us:

“Previous experience would be that a steady sum of money would probably be more beneficial to claimants and customers, to help with that budgeting process.”

I think she is right; it is not ideal for the Treasury to provide lump sums instead.

Why was proper uprating not done in this case? The Chancellor pointed out that legacy benefits cannot be quickly uprated because they are run on antiquated IT systems, as the right hon. Member for Preseli Pembrokeshire (Stephen Crabb) referred to, so uprating takes several months. The Chancellor told us that that was why he was unwilling simply to uprate benefits: it could have been done quickly for universal credit, as we discovered in the pandemic, but not for legacy benefits.

In an earlier debate, I recall the shadow Secretary of State, my right hon. Friend the Member for Leicester South (Jonathan Ashworth) brandishing a document from an IT company, perhaps Oracle, about the front end that it had built for the Department’s legacy systems, which it said enabled changes to be made to them more quickly. I wonder whether the Minister, in closing, could tell us the truth behind that claim about the front end that had been provided. I know that the Department has certainly commissioned such front ends for the legacy systems over a long time, so I am interested to know why, notwithstanding what that brandished document said, it is apparently still the case that uprating takes four or five months. Are front ends in place? Why have they apparently not made faster changes possible?

In our June 2020 report on the Department’s response to coronavirus, the Select Committee recommended an increase in the speed with which changes could be made to legacy benefits. We said:

“People will be claiming legacy benefits until at least September 2024, the Government’s most recent estimate for completing the rollout of Universal Credit. It is simply not tenable for the Department to continue to operate antiquated systems that prevent Ministers from making timely changes to the rates at which legacy benefits are paid. We recommend that the Department work to increase the speed with which changes can be made to legacy benefit rates.”

In its response in September that year, the Department said that it

“recognises the need to be able to respond to events flexibly which is why we are investing in Universal Credit which is more agile than the systems that support legacy benefits.”

While substantial numbers of people depend on legacy benefits, the Government surely need to keep the systems that support those benefits fit for purpose. They are clearly not fit for purpose at the moment, and that ought to be addressed.

[Kirsty Blackman]

On that note, the new systems that we have created in Scotland under Social Security Scotland are doing exactly what the right hon. Gentleman asks. It has the ability to make those extra payments, because we set up the systems. Does he agree that the Government need to just invest to sort that out for many thousands of people?

[Sir Stephen Timms]

It certainly does need to be done. I am pleased to tell the hon. Lady that on Monday the Select Committee will visit Social Security Scotland and that our vice-chair, the hon. Member for Amber Valley (Nigel Mills), who is in his place, will be part of that group. We look forward to that visit.

The reason why benefit uprating has not worked this year is, of course, the six-month gap between September, when the inflation figure forms the basis of uprating for the following year, and April, when increases take effect. In response to our call for evidence on the cost of living, the Joseph Rowntree Foundation called on the Government to

“commit to a much shorter timeframe for annual uprating between measuring inflation and uprating accordingly, to ensure benefit uprating genuinely reflects inflation for the year in question.”

Lloyds Bank Foundation told us that the Government should

“consider uprating benefits in line with inflation in the autumn to ensure they more accurately reflect the true cost of living.”

That sounds like what was done in the 1970s. The Legatum Institute also suggested reducing the delay between CPI measurement and the application of uprating as well as introducing a mid-year uprating review. Citizens Advice called for a more sustainable, responsive uprating approach, which means

“addressing the lag between benefit uprating decision-making and implementation and the exclusion of the benefit cap from wider uprating.”

It says that while the one-off payments to be made under the Bill

“are more generous…for some households than if uprating had been brought forward”,

there are problems. For example, as we were reminded by my right hon. Friend the shadow Secretary of State, the one-off payments are the same amount regardless of family size. They also have cut-off dates, which risks arbitrarily excluding people from support.

Flat-rate payments being irrespective of family size appears to be pretty unfair to larger families. Overall, the package is somewhat more generous than early benefit uprating would have been, but it is less generous for larger families. The justification for that is not clear.

The North East Child Poverty Committee told us that

“a flat-rate £650 payment for all households on means-tested benefits, regardless of household size, additionally fails to recognise the clear link between family size and essential outgoings, with many larger families (already at much greater risk of poverty, a situation compounded by the two-child limit) facing intolerable financial pressures as a result of rising household bills.”

I will make one final point. One great advantage of the Chancellor’s package for low-income families, compared with a straightforward benefit uprating—I was grateful to the Secretary of State for confirming this—is that the benefit cap does not apply. It is striking that when it appears that the headline rate of social security benefits is likely to be raised by perhaps 10-plus per cent. next year, there is no indication at all about the benefit cap being lifted at all. That means that the growing number of families whose benefit has been capped will receive no increase in their income at all at a time when inflation is likely to be over 10%.

In evidence to the Select Committee, the Child Poverty Action Group Told us that

“the Government has made a welcome commitment to increase benefits in April 2023 in line with prices. However, not all price-related elements of the system are included in the annual uprating exercise and the benefit cap means a substantial minority of claimants—an estimated 150,000—will see no increase at all and face another real terms cut to their benefits.”

At a time when inflation is so high, surely at least the level of the benefit cap must be reviewed. Will the Minister give us any encouragement that it will be, ahead of April next year? For now, and in the context of the Bill, it is welcome, and quite a significant precedent, that the benefit cap will not apply to these additional payments.

--- Later in debate ---

[David Rutley]

Whatever we want to call him, he will take this forward with aplomb, that is for sure.

There was a serious question about why the number of means-tested benefit recipients will fall in the second cost of living payment period, and it is because the projections reflect mortality rates. However, they do not reflect the important work many of us are doing to raise awareness, so hopefully many more people will claim it.

I think I have now answered most of the questions. The hon. Member for Richmond Park asked about industrial injuries disablement benefit, on which I would be more than willing to talk to her separately. We should not underestimate the additional payments from the household support fund to help people with the cost of essentials. The Chancellor announced another £500 million in his latest statement, and it will be available from October 2022 to March 2023.

In England, the £421 million household support fund will be administered by local authorities, and the devolved Administrations will receive £79 million through the Barnett formula. Importantly, there will be new guidance to local authorities on this latest extension of the household support fund to reflect the fact that some people who are not able to secure these additional payments will be able to go to their local council to secure support.

[Kirsty Blackman]

Some household support funds ran out months earlier than expected. Does the Minister expect the new funds will be sufficient and will last as long as they are supposed to last?

[David Rutley]

The current tranche of household support fund is on top of all the other benefits we have talked about. As we have said, these are substantial additional support payments that are being made available, and the £500 million on top is there to help those people who have further needs with the cost of essentials. Further guidance will be made available.

We are working at unparalleled pace to get money into people’s pockets. It is vital that we meet the deadline for Royal Assent by 30 June, after a fast-tracked passage, so that we do not create a strong risk that we fail to make payments in July. We want to make sure that the most vulnerable people in our society—people on low incomes, people with disabilities—get the payments and support that they need. As I have highlighted already, this payment package in total comes to £37 billion this year alone. The Bill helps to deliver key elements of the support package to those who need it most. I strongly support these measures and commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill stood postponed (Order, this day).

Social Security (Additional Payments) Bill: Money

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Social Security (Additional Payments) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(1) a sum not exceeding £326 to anyone who is entitled, in respect of 25 May 2022, to—

(a) universal credit or state pension credit,

(b) an income-based jobseeker’s allowance, an income-related employment and support allowance or income support, or

(c) working tax credit or child tax credit;

(2) a sum not exceeding £324 to anyone who is entitled, in respect of a day after 25 May 2022 and not later than 31 October 2022, to a benefit mentioned in paragraph (1);

(3) a sum which, together with any sum paid as mentioned in paragraph (1) or (2), does not exceed £650 to anyone who receives a working tax credit or child tax credit of at least £26 in the tax year 2022- 23;

(4) a sum not exceeding £150 to anyone who is entitled, in respect of 25 May 2022, to—

(a) a disability living allowance,

(b) a personal independence payment,

(c) an attendance allowance or a constant attendance allowance,

(d) an adult or child disability payment,

(e) an armed forces independence payment, or

(f) a mobility supplement.—(Michael Tomlinson.)

Question agreed to.